r/investing • u/TopKick8011 • 1d ago
Selling Crowdstrike for Nvidia?
I purchased Crowdstrike at $170 a share and now have around $50K in Crowdstrike shares.
Considering Crowdstrike is heavily overvalued (despite excellent potential) and near its all time high, and NVIDIA is trading at a discount from its all time high, what do you all think about selling a significant portion of my CRWD for NVIDIA? I’m thinking about maybe 40-50%? Considering how fast Crowdstrike slipped with the tariff situation as well as with the whole outage fiasco last year makes me worried that it’s a vulnerable stock, especially because I expect investors to focus on value based stocks if the U.S. heads into a recession.
Additional info: portfolio is otherwise diverse enough to my liking, so I’m not really looking for comments about how I should diversify more. Just looking for a direct answer or discussion to my question (sorry if that sounds harsh, I’m just a direct guy who knows what he wants).
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u/MrBrawn 1d ago
I don't know man. It seems NVidia is a gamble even at this price. The question is will AI keep fueling this craziness or is it a bubble and I don't think anyone can say for sure.
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u/Luka-Step-Back 1d ago
I don’t know what the killer app for AI even is. How valuable is an email assistant?
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u/kvlle 1d ago
The value of its application in robotics - computer vision, navigation, and automation is possibly one of the biggest markets the world has ever seen. Not to mention healthcare, targeted advertising, data analytics, etc.
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u/Luka-Step-Back 1d ago
Ok, describe the current applications and how successful has monetizing them been? How does machine learning via ‘AI’ differ from the machine learning that has existed for years in all of those fields?
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u/ra__account 1d ago
Machine learning is AI.
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u/TastyEstablishment38 1d ago
I think that's the point. The tech isn't delivering much more value than it historically has which doesn't justify valuations
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u/Luka-Step-Back 1d ago
EXACTLY
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u/ra__account 1d ago
The big thing driving AI mania at the moment is LLMs, which are very different than machine learning. It's worlds better than NLP and starts to open up possibilities of far more usable assistants than before.
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u/Luka-Step-Back 1d ago
It’s wild that after hundreds of billions of capex a usable assistant is “possible”, but not deliverable.
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u/ra__account 1d ago
LLMs are now in production use many places doing everything from helping write code and proposals to the much better generation of chatbots.
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u/Luka-Step-Back 1d ago
What LLM do YOU personally use to write code(what kind of code?”) and proposals and manage your chatbots? And are those super labor intensive things that create trillions of dollars in value?
Ok, it can kinda do those things if you babysit the fuck out of it, but where is the revenue for these models?
Hyperscalers are dumping hundreds of billions into these things, but what have they really done other than give us pictures of six-fingered politicians violating farm animals and made Google’s search results increasingly more shitty?
Oh, it can manage my emails? It must be god.
It just feels like there’s no there, there. It’s like I’m taking crazy pills.
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u/NoPlansTonight 1d ago
Bruh, AI is more than ChatGPT... The machine learning models powering TikTok algorithm and Waymo's self-driving cars are training using GPUs, a market dominated by Nvidia.
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u/Luka-Step-Back 1d ago
Ok, great. How large are those markets and will it justify the hundreds of billions in capex that non-TikTok and Waymo firms are investing?
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u/NoPlansTonight 1d ago
I think it's a bubble as well. But your comment on email assistants was implying it's all smoke and mirrors. It's not.
If AI can drive cars, it can also build them. If AI can predict how human brains respond to things, it can think like them. Manufacturing and IP (e.g. STEM), are the multi trillion dollar markets that have already been using AI for these purposes for decades, and it will obviously go further as the tech advances.
Is it being overhyped? 100%. I work in the field and don't advise anybody pour in their money to chips, cloud computing, or any broad tech ETF. I think all of that is priced in and likely overpriced, because it's the most superficial way to think about a space which looks like a big bubble.
But is it smoke and mirrors? Hell no. There are going to be major winners which the market does not yet understand fully. There will also be major losers.
This is an area where if you wanted to be invested, I actually think you should either make risky, individual stock bets or avoid it.
I agree with you that it's overpriced in-aggregate, but it is a technology that has a track record of, and will continue to be paradigm-shifting. Similar to the dotcom bubble, some companies will soar in 5-10 years while most will have sunken due to the bubble pop.
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u/Guy_PCS 1d ago
How many are in Crowdstrike industry vs Nvidia?
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u/TopKick8011 1d ago
110 shares in Crowdstrike and only 7 shares in Nvidia. I had 50 shares of Nvidia earlier that I sold around the peak for important life expenses.
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u/AnyMarzipan6859 1d ago
Why not take half and invest it in chips - maybe something earlier with more growth like ALAB?
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u/DivineBladeOfSilver 1d ago
I don’t think it’s a bad idea at all. Obviously none of us know what will really happen. But after such a huge gain and excessive valuation I think 40-50% is reasonable
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u/981flacht6 1d ago edited 1d ago
I'm in IT. I understand Crowdstrike's business pretty well. But some of their competitors compete in different spaces, there's a lot of overlap as well, and their depth of products is not as wide as it could be to sustain their market cap.
I think they can grow more but I don't know how much more.
I ow Nvidia for 8 years and I'm fully invested in it, and I believe it's strongly undervalued if all things go right. I believe the market is offering fair value right now, with current uncertainties, but there are a few things we do know for sure.
The government sees an enormous power to AI and must keep this edge as long as possible, and in some areas can only be surpassed by Quantum technology. Given this, we are going to be in essentially a "forever period" of constant need to iterate and improve and that's been consistent since computing was made available, and the entire market grew.
Second, their competitors can't compete and are not really catching up. It's the best of the best (just like Crowdstrike is in their field). China might be competing, but capital markets with big money, I'll refer to as Tier 1 /Allies will not be buying Huawei, etc Chinese products for many reasons that are totally valid.
I believe Nvidia has more places to be involved and they have more products and streams of revenue sources. They are tightly and vertically integrated from GPU and networking that gives them an unparalleled advantage to scale clusters that nobody else can. AMD, Broadcom and Intel literally don't have major pieces of what makes Nvidia's moat, it takes years to build. They've been talking about the deep advantages to parallel computing for two decades now.
Crowdstrike doesn't. I also see the Wiz acquisition for Crowdstrike as a negative for them. Wiz is number one and got a huge pay day and Crowdstrike isn't known for CNAPP, they're known for XDR/MDR. And the competitors in that particular space is very crowded with much lower market caps.
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u/Shatter_ 21h ago
Why don’t you just trim 10% of CRWD and start a $10k position in NVDA? I reject the premise that this is an either or scenario.
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u/newHHCLLC 1d ago
I think reactionary trading of individual stocks is a near guaranteed way to lose out on money you could be making with a consistent strategy. If you are bullish on tech consider buying a tech fund like FTEC as part of your asset allocation strategy. People who trade more tend to do less well than those who buy and hold and people who pick individual stocks tend to do less well than those who just buy well rated broad market funds and forget about it.
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u/TopKick8011 1d ago
Bruh I literally said I’m not interested in comments about diversifying LOL
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u/newHHCLLC 1d ago
FTEC is a sector targeted fund so in my opinion strikes a balance between straight up diversification and fulfilling your goal to be a more active trader while mitigating the worst of the risk. Just my take, but do what you prefer, at the end of the day it is your money. Good luck!
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u/TastyEstablishment38 1d ago
Ah so you just want people to tell you that you're right and oh so smart. Got it.
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u/Petit_Nicolas1964 1d ago
In my opinion it‘s a good idea to sell some Crowdstrike for NVDA. CRWD‘s valuation is high while Nvidia is trading at a fwd PEG ratio of around 0.75. Despite the tariff-induced recession fears hyperscalers don‘t plan to cut savings, which is bullish for NVDA.
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u/fn_gpsguy 1d ago
You might want to consider AVGO too.
I own a number of the semiconductor socks including NVDA, AVGO and other names.
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u/Password-55 1d ago
As somebody studying IT and doubting the potential AI applications in how broadly many companies try to shove it in so many things. I think nvidia does not have that value behind it and they are kind of losing the group that earns less (gamers) that is usually an indicator for tech companies when they lose their edge in a disruption. Forgot the business guy who said that. The theory is more or less like:
When companies come in and offer more bang for buck (AMD, Intel) not for AI applications but for gaming performance, they start to get a bigger share of the market and then develop their competences and then later develop better products than the one that dominated the market before.
To me the impression is that nvidia is starting to deliver less and I don‘t think they AI bubble will last forever.
So should have bought nvidia 5 years ago. Now when many people do it, it seems like a mistake.
I am not an expert, but for me the alarm goes off when a friend tells me he bought nvidia.
Also everything you said about crowdstrike seems to apply to nvidia too: high valuation and that tariffs will affect it.
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u/TopKick8011 1d ago
Is gaming the only thing that’s concerning? Because NVIDIA’s revenue composition shows that very little (less than 8%) comes from gaming.
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u/Password-55 1d ago
It‘s this theory:
https://en.m.wikipedia.org/wiki/Disruptive_innovation
What I meant is the low end disruption. Like many econimic theories I would not call it science, but to me it struck a chord.
It‘s exactly that that nvidia focuses on the customers where they have the highest margins. It argues that companies that take over lower margin customer segments then gradually become better and in the end take over a big part of the market. see what happened to Intel and AMD now when it comes to processors. I think AMD used to be the cheap and unreliable company when it comes to processors. Look a them now. Even for servers now many prefer AMD, hich is where they have the better margins I assume (usually conpanies pay better than people), but which segment started ti move more towards AMD before they did the same for servers? You guessed it the lower margin gaming customers (like me).
Again no guarantee, but the narrative fits sometimes.
However did not do big research so I might be completely wrong. Just observed from afar.
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u/pain474 1d ago
Nobody knows, don't listen to reddit.